DOL Fiduciary Rule Update; May Seminar

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DOL FIDUCIARY RULE UPDATE. On February 3, the President issued a Presidential Memorandum directing the Secretary of Labor to:

“Examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.

As part of this examination, you shall prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule, which shall consider, among other things, the following:

(i) whether the anticipated applicability of the Fiduciary Duty Rule has harmed or is likely to harm investors due to a reduction of Americans’ access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice;

(ii) whether the anticipated applicability of the Fiduciary Duty Rule has resulted in dislocations or disruptions within the retirement services industry that may adversely affect investors or retirees; and

(iii) whether the Fiduciary Duty Rule is likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.

If you make an affirmative determination as to any of the considerations identified [above] or if you conclude for any other reason after appropriate review that the Fiduciary Duty Rule is inconsistent with the priority identified earlier in this memorandum then you shall publish for notice and comment a proposed rule rescinding or revising the Rule, as appropriate and as consistent with law.”

The Acting Secretary of Labor responded with the following: “The Department will now consider its legal options to delay the applicability date as we comply with the President’s memorandum.”

Because it is hard to imagine that such an examination will not conclude that the Rule “is likely to cause an increase in litigation” (which was a central purpose of the Rule’s class action lawsuit provision) one could expect that the result of the examination will be the publication by the DOL of “a proposed rule rescinding or revising the Rule.”

(One caveat: the curious syntax of item (iii) above could be read as requiring that the examination determine that a two-part simultaneous test is met – a likely increase in litigation AND an increase in prices paid by investors and retirees.  If this were the case, and the current DOL’s economic analysis agrees with the economic analysis of the prior DOL, the second part of this two-part test would not be met.)

As we have noted in previous e-Alerts and conversations with our clients, financial advisors and financial institutions affected by the rule likely will need to continue their preparation efforts – just to be ready for anything – while employers should monitor developments carefully and not sign any fiduciary contracts or contract amendments unless they are first reviewed and revised as necessary by ERISA counsel.


MAY 11, 2017 SEMINAR.  As previously announced, we’ll be holding our next clients and friends seminar at the BWI Marriott on Thursday May 11, 2017, from 8 a.m. to noon.  The following are some of the topics we’ll cover at the seminar.  (As always, we expect to add topics to reflect developments between now and May 11.)

I. Health and Welfare Plans

  1. Continuing Guidance for Opt-out Payments, SCA Cash-in-Lieu Payments, and the Like
  2. Proposed Changes to the Form 5500
  3. Retiree Health Coverage and Special Rules for Plans Covering One or Fewer Active Employees
  4. A Review of the Employer Mandate Rules’ Mid-year Changes Provisions
  5. Formal Marriage, Common Law Marriage, Domestic Partners and Civil Union Partners
  6. ACA Reporting Update
  7. Updates on Transgender Benefits Coverage
  8. The HFSA Debit Card Rules
  9. Eligibility Exclusions for Individual Employees
  10. Independent Contractors, Leased Employees, Seasonal Employees and Other Special Categories
  11. Update on the Wellness Rules
  12. The Updated Claims Procedures Rules
  13. Qualified Small Employer HRAs
  14. Church Plan Developments

II. Qualified Retirement Plans

  1. Status of the DOL Fiduciary Rule
  2. EPCRS: New Fees and Options for Correcting Missed Deferrals
  3. Review of Permissible Mid-Year Amendments to 401(k) Safe Harbor Plans
  4. New Rules Permitting Funding Safe Harbor Contributions, QNECs and QMACs
  5. Form 5500 Audit Exception and Other Form 5500 Issues
  6. New Mortality Tables for Defined Benefit Plans
  7. A Review of the Electronic Delivery Rules
  8. Governmental Retirement Plans Update
  9. Closing of Document Correction Window for 403(b) Plans; Update on IRS Determination Letter/Opinion Letter Program
  10. Keeping Plans in Compliance without IRS Determination Letters
  11. Investment Policy Statement Best Practices

III. Executive Compensation

  1. Update on 457(f), 457(b) and 457(e)(11)
  2. Update on 409A
  3. 501(c)(3) Employers – Compliance with the Intermediate Sanctions and Form 990 Rules
  4. Traps for the Unwary – Health and Welfare Severance Violations, Post-Employment Health and Welfare Coverage, Pre-tax Contributions from Severance Pay, COBRA Reimbursements, Etc.

IV. Labor and Employment Law

  1. Employment Law in the New Administration: What to Expect
  2. Expansion of Age Discrimination Claims and “Subgroup” Theories
  3. Status Update on the Changes to the FLSA Regulations
  4. OSHA Updates – Changes to Post-Accident Drug Testing and Recordkeeping Rules
  5. Updates to Independent Contractor Issues
  6. Sexual Orientation Discrimination Under Title VII
  7. New EEOC Guidance on Equal Pay and Pregnancy Discrimination
  8. Arbitration Agreements – Should You Ask Your Employees to Sign One?
  9. Maryland, Virginia, and Washington, D.C. Updates, Including New Credit Inquiry Laws, Family Leave Laws, and More

Please contact Alison Christian at 410-321-9000 or achristian@smithdowney.com if you’d like to reserve a spot at the seminar. As always, the seminar is free.